Required information Cerner Corporation announced a first-come, first-serve stock repurchase offer to its...
60.1K
Verified Solution
Link Copied!
Question
Accounting
Required information
Cerner Corporation announced a first-come, first-serve stock repurchase offer to its shareholders the company agreed to repurchase 2,653,780 shares of its common stock in exchange for total consideration of $173,434,000. Cerner had 329,641,500 total shares outstanding before the redemption.
You acquired 16,482,075 shares of Cerner's stock two years ago for $20/share. You were the only shareholder to participate in the repurchase offer and Cerner agreed to redeem the total number of shares directly from you.
Choose the response that accurately represents the amount and character of taxable income that you would report on your tax return with respect to the stock redemption assuming the redemption DID NOT qualify for exchange treatment.
If applicable, you may assume Cerner's current E&P balance is well in excess of its total dividend distributions for the year.
Multiple Choice
A.$173,434,000 short-term capital gain
B.$120,358,400 dividend income
C.$120,358,400 long-term capital gain
D.$173,434,000 long-term capital gain
E.$173,434,000 dividend income
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
